Assume the following data for this economy. Full employment GDP occurs at $400. Assume that the MPC = 0. All figures are in billions of dollars.

Assume the following data for this economy. Full employment GDP occurs at $400. Assume that the MPC = 0.75.  All figures are in billions of dollars.
GDP              C                    S                     I                      G
240                 244                 -4                    8                     8
260                 260                 0                     8                     8
280                 276                 4                     8                     8
300                 292                 8                     8                     8
320                 308                 12                   8                     8
340                 324                 16                   8                     8
360                 340                 20                   8                     8
380                 356                 24                   8                     8
400                 372                 28                   8                     8
1.Equilibrium GDP for this economy is ___________.
2.What is the problem facing this economy? _____________________
3.What general solution do you recommend? ____________________
4.The simple multiplier in this problem is equal to __________________.
5.What is the needed change in government spending: ________________
 
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